4 Software Stocks Set to Pull Off a Beat This Earnings Season

Industry Overview - Software stocks are experiencing strong demand driven by digital transformation and the rapid adoption of artificial intelligence (AI), including generative AI and Agentic AI moving into real business applications [1] - Key growth drivers include software-as-a-service models, cloud migration, hybrid work models, and increased usage of online payment platforms [1] Factors Favoring Software Stocks - The proliferation of AI-powered applications in various sectors such as voice recognition, telemedicine, and business management software is benefiting industry players [2] - The adoption of cloud-based services, IoT, AR/VR devices, and accelerated 5G deployment are enhancing software stock performance [3] - Rising cyberattacks are prompting enterprises to invest more in cloud-based security solutions, shifting preference towards software-defined models for agility [4] Customer-Centric Trends - A customer-centric approach allows users to perform actions with minimal provider intervention, while pay-as-you-go models enable scalability for different user needs [5] - Subscription-based business models ensure recurring revenues, with the affordability of SaaS models particularly benefiting small and medium-sized businesses [5] Company Highlights Snowflake - Expected to report fourth-quarter fiscal 2026 results on February 25, with a Zacks Rank 3 and an Earnings ESP of +8.08% [8] - Consensus estimate for revenues is $1.25 billion, reflecting a year-over-year increase of 26.9%, while earnings are expected to be 27 cents per share, down 10% from the previous year [9] - Strong customer growth driven by AI capabilities and partnerships with industry leaders like SAP and Google Cloud [10][11] Match Group - Scheduled to report fourth-quarter 2025 results on February 3, with a Zacks Rank 3 and an Earnings ESP of +3.38% [12] - Revenue consensus is $871.6 million, indicating a year-over-year increase of 1.3%, with earnings expected at $1.01 per share, up 23.2% [12] - Benefits from a first-mover advantage in online dating, with Tinder as a key growth driver supported by innovative features and international expansion [13] Synopsys - Set to report first-quarter fiscal 2026 results on February 25, with a Zacks Rank 3 and an Earnings ESP of +0.38% [14] - Revenue consensus is $2.39 billion, reflecting a year-over-year increase of 64.3%, with earnings expected at $3.57 per share, up 17.8% [14] - Growth driven by demand for advanced technology and design solutions, with strong traction for its Fusion Compiler product [15] Cloudflare - Expected to report fourth-quarter 2025 results on February 10, with an Earnings ESP of +0.20% and a Zacks Rank 3 [16] - Revenue consensus is $590.17 million, indicating a year-over-year growth of 28.3%, with earnings per share expected at 27 cents, suggesting a 42.1% increase [16] - Benefits from a growing customer base and robust security solutions, with a dollar-based net retention rate of 119% in Q3 2025 [17]